As an online business person, how do you set prices for your products or services? For obvious reasons, pricing is a very important factor to convince your target market to buy your offerings. When you set it too high, they might think that it’s of less value and not worth their dough. On the other hand, if you set it too low, they will think that it must be of lower quality than its commercial counterparts.

Here are some of the things that must be considered when setting price for your product/service:

1. Ask yourself first – In order for your company to succeed, it is vital that you have a strong conviction in what you are doing. If the business owner himself believes that the price of his company’s products is too high, then he will find it difficult to handle customers’ price objections. First, you have to ask yourself if your offerings are affordable and reasonably priced.
2. Know your target market – Studies have shown that buyers always ask for discounts but they don’t really expect the sales person to grant their request. They are only giving it a try but they will still buy with or without the discount. For instance, if your business website is selling data recovery services, clients would initially ask for cheaper deals merely as a force of habit. If your sales person is not effective in handling situations such as this, you will either lose a prospective buyer or give in to the buyer’s request for bigger discounts.
3. Appreciate the value of your product – In general, it is okay to set a lower price when the company is still beginning to make a name in the industry. This will attract customers to try out your offering and if they are satisfied, they might come back to place more orders. However, the need to consistently offer discounted or cheaper items to keep people’s interest in your product is a big problem. First, you have to learn to defend that your product is really worth the price.
4. Sales negotiation – Online business can be summed up in taking calculated risks. Remember that most of the time, you will deal with people you don’t personally know. Everything is transacted via the internet, so they say. This means that you have to be extra careful in negotiating with your prospects. If your clients are pressuring you to give in to a cheaper business deal, use the “surprised technique.” Make them feel that you are actually shocked that they value your products less. This will force them to lower their expectations.

If you believe that your product has a lot to offer, this will enable you to set your prices correctly and fairly. Justify your price and customers will react accordingly.

This entry was posted on November 27, 2011 at 12:08 pm. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Posted in business advice by evelyn 1 Comment